Illegal Pharmacy Operator Sentenced to Federal Prison

A man who illegally sold thousands of doses of controlled substances and misbranded prescription drugs was sentenced today to 15 months in federal prison, fined and ordered to forfeit over $500,000 in drug proceeds.

Jon Stidham, age 57, from McClelland, Iowa, received the prison term after a January 5, 2022 guilty plea to one count of conspiracy to deliver, distribute or dispense methyltestosterone, a Schedule III controlled substance, by means of the Internet without a valid prescription and without complying with federal and Iowa licensing requirements, and one count of conspiracy to introduce misbranded drugs into interstate commerce with intent to defraud or mislead and to commit mail fraud.

In a plea agreement, Stidham admitted that he operated a business called Kennel Supply, LLC.  Kennel Supply provided a variety of items used for the operation of kennels and the care of farm animals at a brick-and-mortar location.  On the Internet, Kennel Supply sold controlled substances and non-controlled prescription drugs that require prescriptions to lawfully dispense to the ultimate user.  From 2015 through October 12, 2018, Stidham distributed and sold over 300,000 doses of methyltestosterone, a controlled substance, without valid prescriptions, profiting $324,303.  During that same time-period, Stidham illegally distributed over 50 types of misbranded prescription drugs without a valid prescription or authorization, and illegally profited $203,207.

Stidham was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams.  Stidham was sentenced to 15 months’ imprisonment and fined $7500.  He was ordered to forfeit $527,510 of drug proceeds.  He must also serve a three-year term of supervised release after the prison term.  There is no parole in the federal system.

“The laws regarding the labeling and dispensing of controlled substances and prescription drugs exist to protect the health and safety of our community, said Acting U.S. Attorney Timothy Duax. When those laws are violated, it endangers those who come into contact with the unprescribed or mislabeled substances. Accordingly, when individuals like Mr. Stidham try to profit by ignoring or violating controlled substance and prescription laws, they will be vigorously prosecuted and the proceeds of their illegal activities will be seized.”

“To protect the wellbeing of animals, the FDA regulates animal drugs as part of its mission to protect the public health. This ensures that prescription animal drugs are lawfully distributed and dispensed pursuant to a valid prescription, among other requirements” said Special Agent in Charge Charles L. Grinstead, FDA Office of Criminal Investigations Kansas City Field Office. “We will continue to investigate and bring to justice those who attempt to evade the law.”

Stidham was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.

The case was prosecuted by Assistant United States Attorney Patrick J. Reinert and was investigated by the Drug Enforcement Administration, U.S. Food & Drug Administration Office of Criminal Investigation, and Iowa Division of Criminal Investigation. 

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. 

The case file number is 21-CR-01036.

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